Trading Stock Draw a Stocks Trendline on a Chart

Stocks How to Draw a Stocks Trend-Line on a Chart - How to Draw Stocks Trend Lines on Stock Charts

Principles of How to Draw a Stocks Trend-Line on a Chart

1. Use stocks candle charts to draw stocks trend lines

2. The points used to draw a stocks trendline on a stocks chart are along the lows of the stocks price bars in a bullish stocks market. An upward bullish stocks trend is defined by higher highs and higher lows.
3. The points used to draw a stocks trendline on a stocks chart are along the highs of the stocks price bars in a bearish stocks market. A downward bearish stocks trend is defined by lower highs and lower lows.
4. The points used to draw stocks trend lines on the stock charts are the extremes points - the high or the low stocks price. These extremes are important because a close beyond the extreme chart points tells stocks traders the stocks trend of stocks might be changing. This is an entry or an exit stocks signal.
5. The more often a stocks trendline on a stocks chart is hit but it's not broken, the more powerful its stocks trend signal.

Example 1: How to Draw a Upward Stocks Trend-Line on a Chart

To draw an upward stocks trendline on a stocks chart use two support points in a bullish upwards stocks trend so as to plot the upwards trend-line and then extend the trend-line as shown below. The upward stocks trendline on a stocks chart will show the general direction of stocks prices & as long as price is above this upward trend line then the upwards trend will remain intact - bullish upwards stock trend.

If stocks prices move below the upward trend line which is the support level for the bullish upwards stocks trend then stock traders should close all their open stock trades - because this might be a stocks trend reversal signal. In an upward stocks trend stocks price should generally stay above support level which is marked by the upward trend line on the stocks charts.

Draw a Stocks Up Trendline on a Chart in Stocks

How to Draw an Upward Stocks Trend Line on a Chart - How to Draw a Stocks Trend-Line on a Chart

Example 2: How to Draw a Downward Stocks Trend-Line on a Chart

To draw a downward stocks trendline on a stocks chart use two resistance points in a bearish downwards stocks trend so as to plot the downward stocks trend line and then extend the trend line as shown below. Downward stocks trendline on a stocks chart will show the general direction of stocks prices and as long as price is below this downward trend line then the downward stocks trend will remain intact - bearish downwards stock trend.

If stocks prices move above the downwards stocks trend line which is the resistance level for the bearish downwards stocks trend then traders should close all their open stock trades - because this might be a stocks trend reversal signal. In an downwards stocks trend stocks price should generally stay below the resistance area which is marked by the downward trendline on a stocks chart.

Draw a Stocks Down Trendline on a Chart in Stocks

How to Draw Downward Stocks Trend Line on a Chart - How to Draw a Stocks Trend-Line on a Chart